Transferring a company from one generation of a family to the next is a project that scares a lot of people, both those who are part of these families and the professionals who help them.
There are many things that can complicate the task for families in this kind of transfer, especially since it actually consists of several transfers, and those transfers vary in terms of when they start, when they end, how long they last, and whether or not they overlap in time.
I’m talking here not only about who does what, but also about who benefits, when, and how. On top of that: who decides, who controls, who has the right to do what, who is responsible, who must be consulted beforehand, who must be informed afterward, etc.
Broadly speaking, there’s the transfer of a business’s shares (in English, ownership), and the transfer of the running of the company (management). The smaller the business, the more likely it is that the number of people involved is small, and the larger the business, the more people there are, which increases the complexity.
For each of these questions, there’s an almost infinite variety of possibilities, even if there are “general rules” you can follow.
In the United States, the population is large enough, and the monetary value of family businesses is great enough, that there are a great many specialists available to serve these families and companies, and the lawyers and tax specialists are very creative and help them with various ways of minimizing their taxes at the same time.
The American influence is also felt in English Canada, even though we (fortunately) have fewer lawyers. In Quebec, the influence is felt much less.
From my point of view, Quebec is a distinct society in many respects, including of course language and culture, but also in how families handle their legacy from one generation to the next.
Here, when we talk about succession (“la relève”), it’s often seen as a question of society’s human resources, rather than a question of making sure a family member is interested in and capable of replacing the entrepreneur parent.
For example, when I learned that Groupe Relève Québec existed, I was instantly interested, and I was very surprised to learn that the people who specialize in family businesses are only a small minority of the group.
There’s also the case of CAFÉ (Canadian Association of Family Entreprise), which has existed for more than thirty years, but which for many years now has had no presence in Quebec.
Yet we have lots of entrepreneurs, and lots of family companies. Is it perhaps thanks to the Groupement des Chefs d’Entreprises and its success that there’s no longer room for CAFÉ?
There have been efforts to create associations similar to CAFÉ for Quebecers, but their success has been questionable. I know that HEC and McGill had the Centre International pour les Familles en Affaires (CIFA), but my Google search comes back with links dating from 2010 to 2012.
I also see mentions of the Institut Québecois pour les Familles en Affaires, including a recent news item saying that the Molson family contributed a sum of money to support it.
Coming back to the title of this blog, I was talking about transferring the business and the wealth at the same time. This doesn’t mean I believe keeping the company in the family is always the best solution, because that’s far from the reality.
What I advocate is that business owners do a good analysis and some long reflection to see how they’ll transfer not only the company they created, but also the value of that business as family wealth for the next generation, together if possible.
To me, it seems that elsewhere this is much more common and a higher priority than here, and I’d like to be part of the improvement here at home.
